Financial Resilience During Investment Market Volatility – KiwiSaver | WealthBuilder | Income Generator

Weather the Storm - Financial Resilience

Research on investor confidence shows that those who are more knowledgeable and engaged with their investment are more confident. KiwiSaver members under the age of 30 are the least knowledgeable and confident about their investments.

Over the past years KiwiSaver returns have generally been positive. While there have been patches of volatility, younger members of the 18-30 age group have never experienced a major fall in the value of investments in their adult lifetimes.”

Our key messages:

• It’s normal for the value of investments to rise and fall.
• You can prepare for downturns in financial markets by choosing the right fund for when you need the money.
• Lower-risk funds are better if you need the money in the short-term (3-7 years) – for example, if you are planning to use the money for a deposit on a first home.
• Higher-risk funds are better if you don’t need the money for many years, for example, until retirement.
• Keep contributing. Your contributions are buying assets at a lower price during a downturn.
• Get help and advice before making any investment changes. Switching from a higher-risk fund into a lower-risk fund during a market downturn means you lock in any losses.

Markets go up as well as down

Recent research from the Financial Market Authority (FMA) into investor platforms and KiwiSaver switching behaviour show that some newer investors may not be prepared for a market downturn.

Volatility is an expected feature of markets, and how to best prepare for the inevitable downturns.With this is mind, we feel it timely to share this short video – ‘Keep the big picture in mind’ on social media

https://youtu.be/aQ_orbooZ54

Also, sharing tips from personal finance writer Mary Holm – How to prepare for a market downturn: https://www.fma.govt.nz/…/mary-holm-preparing-for-downturn